Why flying is expensive

Flying is expensive, at least in comparison to lesser modes of transportation.

If everyone agrees that the cost is high, it is difficult to find any two people who agree on why.

Some – indeed, many – blame the Federal Aviation Administration and its myriad rules and regulations. Others say that engines are too costly and should be as cheap as those that power cars. Fuel gets a lot of the blame, and so does insurance. A few think the airframe manufacturers are making a killing. Others say that frivolous lawsuits are killing the industry.

Where the truth lies is hard to pin down, but there is one overriding factor mentioned by everyone in the aviation business: the low production volume of airplanes and everything that goes into them keeps unit costs high.

A car manufacturer builds hundreds of thousands of vehicles each year. An airplane builder produces tens to hundreds. While safety is important in automobile construction, it is – or should be – paramount in airplanes. An automobile engine that loafs along on 10% of its power at highway speeds, and never reaches 100% in its lifetime, wouldn’t last long in an airplane where it would cruise at a constant 65% to 70% and take off routinely at 100%. The two really can’t be compared fairly.

WHAT ARE THE ANSWERS?

THE FAA

Mike Henry has answers to those who think FAA rules and regulations are to blame. He is a 12-year veteran of FAA regulatory offices. Now managing Easton Municipal Airport (ESN) in Maryland, he speaks as one who has experienced both sides of the process.

Henry summarized the FAA attitude toward rules and regulations for us: “How do we make it safe, accessible and affordable?” is the question that guides regulators. He believes that the use of designees is a good example. “It lets people with appropriate experience make decisions,” he said. “That’s cost effective for the end user and for the government.”

Every significant FAA rule must go through a strict cost-benefit analysis by law, Henry pointed out. “And there are times when it doesn’t work out,” he added. “In most cases, rule-making doesn’t impose.”

Vern Raburn, CEO of Eclipse Aviation, insists that the FAA is not to blame for the cost of flying. A staunch defender of the agency, he praises the close cooperation it has given to Eclipse which, he says, actually has kept the cost of developing the first Very Light Jet lower than might have been expected.

Henry agreed. “I think the FAA’s willingness to work with the industry is an indication of their willingness to promote aviation,” he said.

Raburn acknowledged that his costs have risen during the run-up to production, but he blames that largely on materials prices. Aircraft-grade aluminum, in particular, has gone up dramatically since the Eclipse project started, mostly due to the rising cost of electricity needed to produce aluminum, but costs for materials such as carbon fiber and fiberglass also are rising with the price of petroleum, he said.

LAWSUITS

Mike Loomis, an Indiana lawyer who specializes in aviation matters, tells people who ask about the high cost of flying that “the way to bring costs down is to fly safely. Stop entering TFRs and giving aviation a bad name, for one thing.” He has a point. While it would be difficult to attribute a cost value to the public and government perception of carelessness, it’s probably in there somewhere and accident rates certainly affect insurance costs.

Loomis doesn’t like the term “frivolous lawsuit,” which often is tossed out as contributing to the cost of liability insurance. “Just because someone disagrees with the premise of a lawsuit doesn’t mean it has no merit,” he explained, adding that there are legal sanctions for filing truly frivolous suits. (See separate story on Page 37).

Loomis acknowledges that there are unjustifiable jury awards in some lawsuits, but said that most, if not all, are overturned by appeals courts. The big awards make the news but we seldom hear about the final settlements, he said.

“As long as there are aviation injuries and deaths, there will be liability,” Loomis stated, “and as long as there is liability there will be lawsuits.”

The implication, of course, is that liability insurance is priced according to the risks, which is acknowledged by the insurance industry and brings us right back to Loomis’s “fly safely” advice.

ENGINE PRICING

In conversations with engine builders at Continental and Lycoming, we’ve learned that the cost of aircraft engines is always likely to be high. That’s because the market is so small and the cost of certifying innovations is high.

Gerry Merrill, who has designed turbine engines for several major manufacturers, says it costs around $100 million to bring any completely new engine to production certification. One reason for high certification cost is the lengthy and meticulous process of testing and documenting anything that is to be deemed flightworthy.

“Would you have it any other way?” asked Merrill. While he believes that a small, relatively inexpensive turbine engine eventually will be built for certified aircraft, he says that the concepts of “cheap” and “safe” are difficult – although not impossible – to realize in the same machine.

FUEL

Fuel prices are high and may go higher. We talked with several people knowledgeable about the fuel business, starting with Buddy Stallings, whose Eastern Aviation Fuels is a major Shell distributor. Then we went to Ben Visser, a former Shell chemist who now writes a column for General Aviation News; and we ended up with our own FBO manager.

All of them said that government regulations contribute significantly to the price of aviation fuels.

First and foremost, according to Visser, unlike automotive fuels, Jet-A and 100LL must be formulated to strict federal standards and are, in essence, all the same. Meeting those standards is expensive, but assures consistent quality and safety. Visser echoes Merrill’s “would you have it any other way?” question.

Transportation costs are another important factor. Visser and Stallings both pointed out that 100LL can’t be run through pipelines – the cheapest way to get it from place to place – because it contains lead and tight environmental regulations exclude leaded fuels from pipelines. Potential lead contamination of other products is the reason, and also is why railway tank cars and tank trucks used for 100LL may not carry other fuels. Aviation gasoline is a tiny fraction of the fuel business, so dedicating trucks and tank cars to it makes their use expensive.

A recent, and some say onerous, federal regulation requires fuel trucks at airports to be parked on dedicated pads surrounded by spill-control berms. While the regulation does not take effect immediately, airport managers and FBO owners already are concerned about the added cost and inconvenience – which, almost certainly, will be reflected in fuel prices.

THE BOTTOM LINE

It is tempting to say of flying’s cost, “Get used to it.” However, innovations are coming along, some of which we see at every air show. None is likely to make flying cheap, but each contributes to making it incrementally cheaper.

A few years ago the least expensive business jet cost five times as much (in today’s dollars) as the Very Light Jets being introduced today. That’s a difference of 80%. Seen in business jet terms, flying is becoming a whole lot cheaper. The change is less dramatic for the airplanes most of us fly, but new materials and production methods are making noticeable differences.

We will not see, and really wouldn’t want to see, a day when airplanes are as cheap as family sedans and the skies are full of them. But right now you can buy an IFR-capable Liberty XL2 for the price of a fully equipped Cadillac or a decent Mercedes-Benz. Sure, the Liberty only has two seats, but it flies twice as fast as the best speeds you’ll make on most Interstates, and without stop-and-go driving.

Then there’s Gerry Merrill’s confident prediction that a four-place, turbine-powered airplane as safe as an Ercoupe will be available for $70,000 – someday.